Opioids and the Labor Market (2018 version)

Meet the Authors

Dionissi Aliprantis is primarily interested in applied econometrics, labor and urban economics, and education. His current work investigates neighborhood effects on education and labor market outcomes.

Mark Schweitzer is senior vice president at the Federal Reserve Bank of Cleveland. He advises and informs the Cleveland Reserve Bank’s president and board of directors on regional economic developments and economic policy issues.

This paper has been revised. Find the most recent version of the paper here.

This paper finds evidence that opioid availability decreases labor force participation while a large labor market shock does not influence the share of opioid abusers. We first identify the effect of availability on participation using the geographic variation in opioid prescription rates. We use a combination of the American Community Survey (ACS) and Centers for Disease Control and Prevention (CDC) county-level prescription data to examine labor market patterns across both rural and metropolitan areas of the United States from 2007 to 2016. Individuals in areas with higher prescription rates are less likely to participate after accounting for standard demographic factors and regional controls. This relationship remains significant for important demographic groups when increasingly strong panel data controls, including a full set of geographic fixed effects and measures of local labor market conditions in 2000, are introduced to the regressions. We also investigate the possibility of reverse causality, using the Great Recession as an instrument to identify the effect of weak labor demand on opioid abuse. The share abusing opioids did not increase after the onset of the Great Recession. The evidence on the frequency of abuse is more ambiguous since the identified increases could be the continuation of a pre-trend.

Headlines

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